Alarm bells sounded over new EU aid instrument proposals

Press conference on Neighbourhood and the World by Federica Mogherini, high representative of the European Union for foreign affairs and security policy and vice-president of the European Commission; Johannes Hahn, member of the European Commission in charge of European neighbourhood policy and enlargement negotiations; Neven Mimica, member of the European Commission in charge of international cooperation and development; and Christos Stylianides, member of the European Commission in charge of humanitarian aid and crisis management. Photo by: European Union

BRUSSELS — The European Commission unveiled more detail Thursday on its plan to bring most of its foreign spending, including development assistance, under one instrument, arguing it is the best way to promote the bloc’s political priorities.

However, the proposal triggered alarm among civil society organizations as it failed to include “poverty eradication” as a specific objective of the new instrument — which would account for the vast majority of the bloc’s aid budget — but did identify “migration and mobility” as a target issue.

Federica Mogherini, the EU foreign policy chief, told reporters the bloc’s overseas priorities for the instrument include supporting the European Union’s “neighborhood, Western Balkans, Africa, development — including poverty eradication as the main focus — human rights and democracy, climate change, and migration.” However, article three of the proposed regulation, which lays out the instrument’s aims, makes no mention of poverty eradication.

Jonathan Beger, director of EU advocacy at World Vision EU, said the proposed regulation showed development being “subsumed” under the political interests of the EU as commissioners talked about poverty eradication but put something else in writing. “You have a regulation, it’s a legal basis [for spending]. If the aim is development, poverty eradication, and the Sustainable Development Goals, where are they?”

The mention of migration, in particular, has some European civil society organizations concerned. Under the proposed regulation, which must be negotiated with the European Parliament and member states, 10 percent of the new €89.2 billion ($103.38 billion) Neighbourhood, Development and International Cooperation Instrument, or NDICI, would be targeted at “addressing the root causes of irregular migration and forced displacement, and to supporting migration management and governance, including the protection of refugees and migrants' rights.”

“Indirectly, all of our development tools would address the root causes of migration.”

Development Commissioner Neven Mimica told reporters Thursday that “indirectly, all of our development tools would address the root causes of migration.”

Elsewhere in the budget, outside the overseas instrument, the EC also wants to almost triple spending on migration and border management to €34.9 billion.

Oxfam’s EU policy adviser, Hanna Saarinen, said that the EU risks eroding its international reputation by trying to “appease member states who want to be tough on immigration.” However, Saarinen praised other parts of the proposal for “a clear focus on human rights, democracy, and the crucial role played by civil society groups.”

The proposals are part of negotiations over the EU’s next long-term budget, which would last from 2021-2027. The new instrument makes up most of the €123 billion the EC is proposing to spend on the EU’s external budget, for work outside its borders, during that time, up from €94.5 billion in the period 2014-2020. The rest covers things like preaccession funding for states wanting to join the EU, support for member states’ overseas territories, humanitarian aid — €11 billion up from €8.5 billion — and nuclear safety.

The NDICI sets spending targets of 20 percent on human development, including gender equality and women’s empowerment; 25 percent on climate change; and the stipulation that at least 92 percent of spending should fall within the definition of official development assistance as set by the Organization for Economic Co-operation and Development.

The EC envisages an NDICI with three pillars: Geographic, which would account for €68 billion, including €22 billion for the so-called European “neighborhood” — the countries around the EU’s borders — which is up by almost a quarter on the last period, and €32 billion for sub-Saharan Africa, up from €26.1 billion euros; thematic, such as human rights, civil society, peace, and “global challenges” like health and education (€7 billion); and a rapid response component for conflict prevention and crisis response (€4 billion).

“Most constituencies can be relatively happy with the numbers that they’ve seen, as they are today,” said Andrew Sherriff, head of program for European external affairs at the European Centre for Development Policy Management. “Whether you care about Africa, or the neighborhood, or peace building, the numbers are not necessarily a shock and many of them are a quite significant improvement.” He said the merged instrument made comparisons with funding under previous budgets difficult, but added, “I don’t think that’s necessarily prima facie a conspiracy to obfuscate.”

Sherriff said the omission of poverty eradication from the objectives didn’t necessarily mean the issue would be sidelined, since the regulation does refer to the relevant articles of the EU Treaty on this theme. He added that the SDGs themselves are designed to address issues beyond poverty alleviation.

The challenge now, he said, is for the different interest groups to make common cause to prevent the overall amount of external spending being cut during budget negotiations, which the EC hopes to conclude in time for the European Parliament elections in May next year. “If [they] all dive down into the detail of the instruments and look for their pot of money ... it will be very easy for the same thing that’s happened at pretty much every other” long-term budget negotiation to happen, which is that the budget for external spending “suffers the largest cuts,” he said.

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The advantage of foreign affairs, including development, being “back at the top table of European politics” is “you can make a case for more resources,” Sherriff said. The downside is the need to guard against short-term political priorities skewing spending. “There are some safeguards in the proposals about how to manage that, but you have to be vigilant.”

Mogherini said the EU remained firm in its development commitment, “putting more money on it and ring fencing this money so that our successors will be able to reuse unspent funds on a multiannual basis so that the long-term priorities cannot and will not be sacrificed to short-term pressures,” she said.

The development commissioner has “willingly allowed his funds to be plundered.”

— Maria Heubuch, member of the European Parliament

The regulation stipulates that the NDICI “should contribute” to the EU’s aim of giving 0.7 percent of its collective gross national income as ODA by 2030, and 0.2 percent to least-developed and fragile countries. Mimica tweeted that poverty eradication was “at the heart” of the proposal, but advocates pointed to the omission of poverty eradication from the “specific objectives” outlined in Article 3 of the proposal.

Beger, from World Vision EU, said: “You look at tweets from Mimica saying it’s such a strong regulation on SDGs and poverty eradication ... [but] where? The first time that comes up is 15 pages later. It’s unbelievable, really.”

The regulation states that its actions should “pay particular attention to interlinkages between Sustainable Development Goals and to integrated actions that can create co-benefits and meet multiple objectives in a coherent way.”

“That’s not even making the SDGs a goal,” Beger said. “I couldn’t have wished for weaker language on development, frankly.”

Greens politician Maria Heubuch, from the European Parliament’s development committee, said in a statement Thursday that the development commissioner has “willingly allowed his funds to be plundered. The EU treaties define global poverty eradication as the goal of development cooperation. I urge the commission to come forward with a revised legislative proposal."

Mogherini said the move would mean more transparency and democratic scrutiny over how EU development money is spent. “All our development aid will finally be subject to the budgetary control of the European Parliament and the parliament will also be involved at crucial stages of the process, both in implementation and monitoring,” she said.

The commission’s plan also flags the expansion of the use of guarantees — using EU taxpayer money to cover certain risks to encourage more private investment in development projects. Unlike current efforts, which are focused on Africa and the EU neighborhood, the new model would be global, and have a potential €60 billion at its disposal, which the EC says could generate half a trillion euros in investment between 2021-2027.

Some NGOs argue there is not enough evidence that this model encourages the most difficult human development projects. However, senior EU officials told reporters Thursday that the fact the fledgling European Fund for Sustainable Development has received requests for €3.5 billion in guarantees, despite having just €1.5 billion available, was a promising sign. “That makes us think that there is a demand out there, not only from the European private sector, but also from private sector all over the world, that we can increase notably the amount of sustainable development private investment that we can leverage,” an official said.

An off-budget item also announced this week, and likely to provoke scrutiny, is the €10.5 billion European Peace Facility, designed to support actions with military and defense implications, which under the Lisbon Treaty cannot be funded by the bloc’s budget. An official told reporters that with the EU training militaries in Mali, Central African Republic, and Somalia, these forces “need equipment to do their job and therefore someone has to provide that equipment,” not ruling out weapons, subject to approval from EU member states and with appropriate monitoring systems in place.

The proposal for the NDICI will now go to the European Parliament, which has passed resolutions opposing a single instrument. The chairs of the parliamentary development and foreign affairs committees are due to meet Tuesday next week for an initial exchange of views.

In early July, the parliament’s Conference of Presidents will meet to decide whether to negotiate on the basis of the EC’s proposal; to indicate problems and ask to separate some parts of the single instrument; or to reject it outright, for which a plenary vote would be needed.

Member states in the Council of the EU will have their say too, likely once Austria takes over the six-month revolving presidency in July. If the parliament resolves to scrap the proposal, but member states want to move forward, then the parliament will require an absolute majority in plenary to overturn the council and send the EC back to the drawing board.

About the author

Vince Chadwick is the Brussels Correspondent for Devex. He covers the EU institutions, member states, and European civil society. A law graduate from Melbourne, Australia, he was social affairs reporter for The Age newspaper, before moving to Europe in 2013. He covered breaking news, the arts and public policy across the continent, including as a reporter and editor at POLITICO Europe.

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